SUPER NOTES CHs 14-17. LOOK for the $ -MONEY QUESTIONS. What Are Taxes?. Taxes are required payments to local, state, or national governments. Taxes give the government the money it needs to operate.
LOOK for the $-MONEY QUESTIONS
Taxes are required payments to local, state, or national governments.
Taxes give the government the money it needs to operate.
Without taxes, we would not have services we need such as roads, education, healthcare. police, etc.
Federal and state taxes are progressive taxes, meaning that the richer you are, the higher the percentage you pay. Sales tax is a regressive tax, meaning the richer you are, the less of a percentage of income is taken away.
Federal taxes (USA)
State taxes (California)
Local taxes$FICA: funds (FICA)=Federal Insurance Contributions Act
$1. Medicare: Health insurance for 65 and over
$ 2. Social Security: old-age and disability insurance.
$ Local governments (like cities) mostly get cash from property taxes.
In Eastvale, the average property tax per year is about $8000.
Fiscal policy is the use of government spending and revenue collection to influence the economy.
One such example is the $700 billion Stimulus Package that was passed by Obama in 2009.
$ Expansionary policies are policies that encourage growth or expansion. They often involve more government spending (like stimulus) and tax cuts. Good for recessions. $Purpose is to increase output.
$ Contractionary policies are policies that encourage slowing down growth. They involve decreasinggovernment spending and raising taxes.
The Federal Reserve, or Fed, is the nation’s central bank that lends money to banks when they need it.
The Fed’s monetary policy refers to the actions that they take to influence the GDP and rate of inflation in the economy.
$ The Fed alters their monetary policy to lessen the effects of the business cycle.
$ If the Fed wanted to encourage banks to lend out more of their reserves to Americans, they would reduce the discount rate, or the rate they charge banks to borrow money.
The lower the interest rate, the more demand there will be for money OR$as interest rates decrease the demand for money increases.
$ If the Fed is fighting contraction (slowdown in economic growth), they will institute an easy money policy. In other words, they will increase the money supply in the US and encourage investment.
Tariff: a tax placed on imported goods (example: Toyota costs more than Dodge)
Some countries join together and ban tariffs and trade restrictions between them
$ NAFTA: North American Free Trade Agreement: will eliminate all tariffs and other trade barriers between Canada, Mexico, and the United States.
$ Most successful CUSTOM trade union: European Union (EU)